Advance Payday Loan
An advance payday loan is just one of many financial services that lenders are beginning to offer applicants for short-term financial solutions. Others include tax services, auto loans, insurance, and prepaid debit cards. With many businesses offering the same services, competitive pricing can now be found. It is the advance payday loan, however, that can give customers well-timed relief in times of difficulty.
An example would be a new couple struggling to make ends meet, even with the benefit of a new salary. The time it takes to stabilize their budget may require help from extra funds. Or individuals and couples involved in school, when juggling school assignment, work, and living expense deadlines at the same time. Certainly an advance payday loan could spell the difference between disaster and peace of mind when every responsibility seems to require attention at the same time.
According to the Chicago Tribune, Dec 29, 2008, in an article titled “Americans Score Low in Financial Literacy”: “Most Americans recognize that overwhelming debt is a burden, but they aren’t always good at anticipating how much their spending will cost them. According to a financial literacy survey by the Center for Economic and Entrepreneurial Literacy, which advocates personal finance education, just a quarter of adults knew that overdrawing their checking account, or bouncing a check, for a quick $100 was more expensive than a payday loan, credit card advance or emergency wire transfer. More than half said they thought a payday loan would be pricier.” http://www.chicagotribune.com/business/chi-mon-watercooler-1229-dec29,0,1911058.story
Educating borrowers on the advantages of an advance payday loan against the alternatives is obviously a major objective of the payday loan industry. It fuels their business and advertises the services they provide. When properly understood, advance payday loans are a tool for specific short-term needs that greatly reduce the costs associated with allowing debts to go unpaid. When used wisely, these advances help individuals in those circumstances and provide a needed service. Advancing one’s payday was probably more common historically than larger loans. The money can be paid back quicker because of the smaller amount. Also, the amount of work required to earn enough to pay is less. These types of loans are often received from trusted parties, like parents, church leaders, or friends. When these individuals are not available or not able to help in a specific instance, the payday lender steps in.
The benefit to loans from trusted individuals is related to the trust factor itself. Oftentimes these individuals know enough about the potential borrower to determine whether or not it is wise to give them a short-term loan, and whether or not they will be able to repay, or if that even matters and they are willing to allow the borrower to default if circumstances require it. The payday loan industry issues an advance payday loan only after checking for similar types of trust, only they look for trust between the borrower and an employer and a financial institution through evidence such as current pay stubs and bank statements.